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Kurt Spoerle - Realtor®
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In another sign of a housing market recovery, new-home sales rose in September to the highest level in more than two years, according to a goverment report. 

Sales sold at an annual rate of 389,000 homes in the month, up 5.7% from the 368,000 sales pace in August.  The last time sales were at this pace, in April 2010, they were being helped by a short-term home buyer's tax credit.

This time, the new home market has been showing steady signs of improvement.  The pace of home building hit a four-year high in September, according to a separate report.  The year-over-year sales improvement in September reached 27.1%.

The improvement in the market is part of a broader recovery in real estate, helped by a number of factors all coming together.  Mortgage rates are near record lows, pushed down by the Federal Reserve's decision to buy $40 billion in mortgages to spur greater economic growth.  The low rates, coupled with years of weak home sales, have resulted in affordable housing prices.  Recently, home prices have started to rise, which is attracting buyers who were waiting for prices to bottom out. 

There has also been a drop in unemployment, a positive development for people looking for mortgage loans.  Foreclosures have fallen to a five-year low, reducing the supply of distressed homes available on the market. 

New home sales are an important component of the nation's overall economic activity.  Not only do they require people working in construction to build the homes, but they also spur the purchases of appliances, carpeting, and other furnishings.

 

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